Netherlands Revises Treaties To Support BEPS Work

by Lorys Charalambous, Tax-News.com, Cyprus

24 June 2015

The Government of Netherlands has successfully negotiated the inclusion of anti-abuse provisions, aimed at combating cross-border tax avoidance, in tax treaties with Ethiopia, Ghana, Kenya, Malawi, and Zambia.

At present, talks are being held with another seven countries and new agreements with several other countries are expected to be concluded before the end of the year.

Minister for Foreign Trade and Development Cooperation, Lilianne Ploumen, said: "These are just the first five out of a total of 23 countries with which we want to reach agreement on combating tax avoidance. We are now starting to see real progress. It is only fair that a company should pay a realistic amount of tax in the country where its operations actually take place."

State Secretary for Finance Eric Wiebes added: "Paying tax in the country where the income is earned is the norm. That is what the Netherlands is working for. The Netherlands wants to lead the way in amending treaties with developing countries."

The Dutch Government explained that the renegotiation of its treaties with developing countries is just one way that the Government is seeking to support the work of the OECD on base erosion and profit shifting (BEPS). The Netherlands is also helping to strengthen tax administrations in developing countries, for example through its Tax Inspectors Without Borders program in Ghana, through which Dutch tax officials are giving their Ghanaian counterparts training on issuing tax assessments to multinationals. The Netherlands is providing assistance of various kinds in over ten other countries to enable local tax officials to raise the quality of their work, the Government said.

In April 2015, the Government concluded a new tax treaty with Malawi, which contains anti-abuse provisions to prevent the benefits of the treaty being used solely to avoid paying tax.

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